Assistant Commissioner of Income Tax (E) Circle-1 , Bangalore V. Karnataka Industrial Area Development Board , Bangalore

ITA 951/BANG/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9835 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-06-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 27-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PADAMCHAND KHINCHA
• Keywords: Depreciation; Charitable institution; Cost of acquisition; Capital receipt; Benefit of exemption
• Section: 43B; 234B; 12AA; 69A; 13; 32; 12; 28; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI. B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.951/BANG/2017 ASSESSMENT YEAR : 2012 13 THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1, BENGALURU. VS. KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD, NO.49, 4 TH & 5 TH FLOORS, KHANIJA BHAVAN, RACE COURSE ROAD, BENGALURU-560 001. PAN AAATK 1305 J APPELLANT RESPONDENT ITA NO.903/BANG/2017 ASSESSMENT YEAR : 2012 13 KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD, NO.49, 4 TH & 5 TH FLOORS, KHANIJA BHAVAN, RACE COURSE ROAD, BENGALURU-560 001. PAN AAATK 1305 J VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1, BENGALURU. APPELLANT RESPONDENT APPELLANT BY : MS. NEERA MALHOTRA, CIT (DR) RESPONDENT BY : SHRI PADAMCHAND KHINCHA, CA DATE OF HEARING : 25-06-2020 DATE OF PRONOUNCEMENT : 03-07-2020 PAGE 2 OF 19 ITA NOS.951 & 903/BANG/2017 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT CROSS APPEALS HAS BEEN FILED BY ASSE SSEE AS WELL AS REVENUE AGAINST ORDER DATED 24 RAISED 12,015 PASSED BY LD. CIT (A)-14, BANGALORE FOR ASSESSMENT YEAR 2012-13 ON FO LLOWING GROUNDS OF APPEAL: ITA NO.951/BANG/2017 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) ERRED IN ALLOWING DEPRECIATION IN RE SPECT OF ASSETS WHICH HAVE ALREADY BEEN ALLOWED AS APPLICATION OF INCOME IN ITS ENTIRETY IN EARLIER YEARS. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) IS CORRECT IN ALLOWING DEPRECIATION WHICH AMOUNTS TO DOUBLE DEDUCTION WHEN ALREADY FULL EXPENDITURE HAS BEEN AL LOWED IN EARLIER YEARS. ITA NO.903/BANG/2017 1. THE ORDER PASSED BY THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) - 14, BANGALORE TO THE EXTENT PREJUDICIAL TO APPELLANT IS BAD IN LAW AND LIABLE TO BE QUASHED. 2. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) - 14, BANGALORE HAS ERRED IN CONCLUDING THAT THE APPELLANT IS ASSESSABL E IN THE STATUS OF 'ASSOCIATION OF PERSONS'. THE ASSESSMENT MADE AND T HE ORDER PASSED ON A WRONG PERSON I.E., UNDER A DIFFERENT STATUS, IS BAD IN LAW AND LIABLE TO BE QUASHED. 3. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) - 14, BANGALORE HAS ERRED IN CONCLUDING THAT THE APPELLANT IS NOT ELIGI BLE FOR EXEMPTION UNDER SECTION 11 OF THE INCOME TAX ACT, 1961. 3.1 THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS ) - 14, BANGALORE HAS ERRED IN (A) CONCLUDING THAT THE ACTIVITIES CARRIED ON BY TH E APPELLANT ARE COMMERCIAL IN NATURE WITH AN INTENTION TO MAKE PROF ITS; (B) CONCLUDING THAT THE APPELLANT IS HIT BY THE PRO VISO TO SECTION 2(15) READ WITH SECTION 13(8) OF THE ACT. (C) NOT APPRECIATING THAT PERFORMANCE AUDIT REPORT IS NOT AN APPROPRIATE BASIS TO JUDGE COMMERCIAL NATURE OR OTHERWISE OF TH E APPELLANT'S ACTIVITIES (D) NOT APPRECIATING THAT THE APPELLANT, A STATUTOR Y BODY OF GOVERNMENT OF KARNATAKA IS A SPECIAL ENTITY TO ACHIEVE THE OBJECT IVES SET OUT IN THE KIAD ACT AND NO ACTIVITY IS CARRIED ON WITH A VIEW TO EA RN PROFITS. (E) NOT APPRECIATING THAT THE SURPLUS GENERATED OUT OF OPERATIONS, IF ANY, IS PLOUGHED BACK FOR FURTHER INDUSTRIALIZATION IN T HE STATE. PAGE 3 OF 19 ITA NOS.951 & 903/BANG/2017 (F) IGNORING, DISREGARDING AND NOT FOLLOWING THE IT AT ORDERS IN APPELLANT'S OWN CASE FOR THE EARLIER YEARS ON AN IDENTICAL ISSU E. 3.2 ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND LAW APPLICABLE, PROVISO TO SECTION 2(15) AND SECTION 13(8) ARE INAP PLICABLE AND CONSEQUENTLY EXEMPTION UNDER SECTION 11 IS TO BE AL LOWED AS CLAIMED BY THE APPELLANT. 4. THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKIN G AND THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITIONS IN RES PECT OF AMOUNTS UNDER SLUM IMPROVEMENT CESS AMOUNTING TO RS. 1,86,71,384/-, LABOUR WELFARE FUND AMOUNTING TO RS. 13,62,04.251/- AND KST TENDER / APPLICATION AMOUNT ING TO RS. 14,056/- RECKONING THAT THESE AMOUNTS OUGHT TO HAVE BEEN PAI D TO THE AUTHORITIES CONCERNED BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME. 4.1 THE LEARNED ASSESSING OFFICER AND THE LEARNED C IT(A) HAVE ERRED IN NOT APPRECIATING THAT THE AMOUNT OF SLUM IMPROVEMEN T CESS, LABOUR WELFARE FUND AND KST TENDER / APPLICATION HAS NOT B EEN CLAIMED AS DEDUCTIONS / APPLICATION OF INCOME AND THEREFORE TH E QUESTION OF MAKING ADDITION UNDER SECTION 43B DOES NOT ARISE. ON PROPE R APPRECIATION OF LAW, THE AFORESAID EXPENSES CANNOT BE ADDED AS INCOME OF THE APPELLANT. THE CONCLUSION DRAWN BY ASSESSING OFFICER AND CIT(A) BE ING ERRONEOUS ON FACTS AND LAW IS TO BE DELETED. 5. THE LEARNED ASSESSING OFFICER AND THE CIT(A) HAV E ERRED IN TREATING EMD/SECURITY DEPOSIT OF RS 2,73,500/- AS INCOME OF THE APPELLANT HOLDING THAT AS PER THE METHOD OF ACCOUNTING FOLLOW ED THE EMD/SD HAD NOT BEEN SHOWN AS INCOME IN 'INCOME AND EXPENDITURE A/C' NOR HAD BEEN KEPT IN SEPARATE BANK ACCOUNT. ON THE FACTS AND CIR CUMSTANCES OF THE CASE AND LAW, EMD/SD IS IN THE NATURE OF A CAPITAL RECEIPT. THE CONCLUSION DRAWN BY ASSESSING OFFICER BEING ERRONEOUS ON FACTS AND LAW IS TO BE DELETED. 6. THE LEARNED ASSESSING OFFICER AND THE CIT(A) HAV E ERRED IN MAKING ADDITION OF RS. 15,16,633/- AS 'UNACCOUNTED WATER S UPPLY CHARGES'. THE ADDITION TOWARDS WATER CHARGES OF RS. 15,16,633/- M ADE BY THE LEARNED ASSESSING OFFICER FOR THE REASON THAT THE SAME HAVE BEEN WRONGLY CREDITED TO KST TENDER / APPLICATION ACCOUNT SHOULD BE ALLOWED AS DEDUCTION IN THE YEAR IN WHICH ACCOUNTING ENTRY HAS BEEN RECTIFIED BY THE APPELLANT. 7. THE LEARNED ASSESSING OFFICER AND THE CIT(A) HAV E ERRED IN MAKING ADDITION OF RS.26,06,141/- UNDER SECTION 69A FOR TH E REASON THAT THE AMOUNTS HAVE NOT BEEN ACCOUNTED IN THE BOOKS OF ACC OUNT. 7.1 THE LEARNED ASSESSING OFFICER AND THE CIT(A) HA VE ERRED IN NOT APPRECIATING THAT: (I) THE APPELLANT EXPLAINED THE NATURE OF CREDITS O F RS 26,06,141; (II) SECTION 69A CANNOT BE INVOKED IF THE NATURE OF CREDITS HAS BEEN EXPLAINED BY THE APPELLANT; (II) THE AMOUNT OF RS 26,06,141/- HAS BEEN ACCOUNTE D AS REVENUE ITEMS IN THE SUBSEQUENT ACCOUNTING PERIOD. PAGE 4 OF 19 ITA NOS.951 & 903/BANG/2017 7.2 ON FACTS AND CIRCUMSTANCES OF THE CASE, THE ADD ITION OF RS 26,06,141/- UNDER SECTION 69A IS BAD IN LAW AND SHO ULD BE DELETED. IF FOR ANY REASON, THE ADDITION IS SUSTAINED, THE LEARNED ASSESSING OFFICER SHOULD BE DIRECTED TO EXCLUDE THE SAME FROM INCOME / ALLOW IT AS DEDUCTION IN THE YEAR IN WHICH THE SAME HAS BEEN AC COUNTED AS REVENUE ITEM. 8. THE LEARNED ASSESSING OFFICER AND THE CIT(A) HAV E ERRED IN MAKING ADDITION OF RS.9,50,93,431/- [RS 35,61,782/- PLUS R S. 9,15,31,649/-] UNDER SECTION 69A OF ACT HOLDING THAT THE APPELLANT FAILED IN EXPLAINING THE NATURE AND SOURCE OF AMOUNTS CREDITED IN THE BANK A CCOUNTS. 9. THE LEARNED ASSESSING OFFICER HAS ERRED IN NOT A PPRECIATING THAT THE APPELLANT DURING THE ASSESSMENT PROCEEDINGS HAS EXP LAINED THAT THE MAJORITY OF THE AMOUNTS ARE IN THE NATURE OF CONSID ERATION FOR ALLOTMENT OF LAND AND HENCE CONSTITUTE CAPITAL RECEIPT IN THE HA NDS OF THE APPELLANT. THE ADDITION MADE UNDER SECTION 69A WITHOUT PROPER APPRECIATION OF THE EXPLANATION OFFERED BY THE APPELLANT IS BAD IN LAW AND SHOULD BE DELETED. 10. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS ) - 14, BANGALORE HAS ERRED IN CONFIRMING THE LEVY OF INTEREST UNDER SECTION 234A, 234B AND 234D OF THE ACT. ON FACTS AND CIRCUMSTANCES OF THE CASE AND LAW APPLICABLE, INTEREST UNDER SECTION 234A, 23413 AND 234D IS NOT LEVIABLE. THE APPELLANT DENIES ITS LIABILITY TO PAY INTEREST UNDER SECTION 234A. 234B AND 234D. 11. IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE AD DUCED AT THE TIME OF HEARING. THE APPELLANT PRAYS THAT THE ORDER PASSED BY THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) 14. BANGALORE BE QUASHED OR IN THE ALTERNATIVE, THE RELIEF AS PRAYED FOR BE KINDLY ALL OWED. [HE APPELLANT PRAYS ACCORDINGLY. BRIEF FACTS OF THE CASE ARE AS UNDER: 2. ASSESSEE FILED ITS RETURN OF INCOME FOR YEAR UND ER CONSIDERATION ON 30/09/2012. RETURN WAS PROCESSED U NDER SECTION 143 (1) OF THE ACT RESULTING IN A REFUND OF RS.4,75,18,960/-WHICH WAS AGREED ADJUSTED AGAINST D EMAND DUE FOR ASSESSMENT YEAR 2009-10. SUBSEQUENTLY, CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES WERE ISSUED TO A SSESSEE, IN RESPONSE TO WHICH REPRESENTATIVE OF ASSESSEE APPEAR ED BEFORE LD. AO AND FILED REQUISITE DETAILS AS CALLED FOR. 3. LD. AO NOTED THAT, ASSESSEE IS A STATUTORY BODY, CONSTITUTED UNDER SECTION 5 OF KARNATAKA INDUSTRIAL AREAS DEVEL OPMENT ACT, PAGE 5 OF 19 ITA NOS.951 & 903/BANG/2017 1966 (KIADA)AND ASSESSEE HAS BEEN PROVIDED WITH SPE CIAL POWERS FOR EXPEDITION, ACQUISITION OF LAND FOR INDUSTRIAL AND INFRASTRUCTURE PURPOSES IN THE STATE OF KARNATAKA. LD.AO NOTED THAT, ASSESSEE BESIDES FORMING LAYOUTS WITH ALL INF RASTRUCTURE FACILITIES FOR PROMOTION OF INDUSTRIES, ACQUIRED LA ND ON BEHALF OF VARIOUS STATE GOVERNMENT ORGANISATIONS FOR IMPLEMEN TING THEIR SCHEMES. 4. LD.AO OBSERVED THAT ASSESSEE HAS BEEN ENGAGED IN ADVANCEMENT OF ANY OTHER OBJECT, BUT OF GENERAL PUB LIC UTILITY, WHICH INVOLVES CARRYING ON ANY ACTIVITY IN THE NATU RE OF TRADE, COMMERCE OR BUSINESS, AND ACCORDINGLY AMENDED DEFIN ITION OF CHARITABLE PURPOSE INSERTED UNDER SECTION 2(15) W AS INVOKED TO DENY EXEMPTION UNDER SECTION 11 AND 12, READ WITH S ECTION 13(8) OF THE ACT. LD.AO NOTED THAT, ASSESSEE CLAIMED EXEM PTION UNDER SECTION 10 (20A) OF THE ACT UP TO ASSESSMENT YEAR 2 002-03. AND SUBSEQUENT TO OMISSION OF SECTION 10(20A), ASSESSEE OBTAINED REGISTRATION UNDER SECTION 12 A OF THE ACT, AND HAS BEEN CLAIMING EXEMPTION UNDER SECTION 11 OF THE ACT. LD.AO TREATE D RS.261,47,58,631/- AS PROFITS, IN THE HANDS OF ASSE SSEE, BEING EXCESS OF RECEIPT OVER EXPENDITURE. LD.AO ALSO MADE FURTHER DISALLOWANCES UNDER VARIOUS PROVISIONS OF THE ACT. ASSESSMENT WAS COMPLETED AT TOTAL INCOME OF RS.289,08,24,577/- , AS AGAINST RETURNED INCOME AT NIL BY CONSIDERING ASSESSEE AS AOP. 5. AT THE OUTSET, LD.AR SUBMITTED THAT, THIS ISSUE STANDS SETTLED IN FAVOUR OF ASSESSEE BY ORDER OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10 AND 2010-11 BY ORDER DATED 04/09/2015 AND 20/04/2016 RESPECTIVE LY, WHEREIN THIS TRIBUNAL AFTER CONSIDERING OBJECTS AND FUNCTIONS OF PAGE 6 OF 19 ITA NOS.951 & 903/BANG/2017 ASSESSEE, AS WELL AS, ANALYSING APPLICABILITY OF PR OVISO TO SECTION 2 (15) OF THE ACT, HELD THAT PROVISO IS NOT APPLICABL E IN CASE OF ASSESSEE. 6. LD.AR SUBMITTED THAT, THERE IS NO CHANGE IN FACT S AND CIRCUMSTANCES OF THE CASE, AS IT WAS FOR ASSESSMENT YEAR 2009-10 AND 2010-11. 7. ON THE CONTRARY, LD.CIT DR SUBMITTED THAT, EXEMP TION UNDER SECTION 11 IS TO BE EXAMINED FOR EVERY YEAR A S PER THE TERMS AND CONDITIONS UNDER THE ACT. SHE RELIED UPON ORDERS PASSED BY AUTHORITIES BELOW. 8. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN LIGHT OF RECORDS PLACED BEFORE US. 9. ASSESSEE WAS GRANTED REGISTRATION UNDER SECTION 12AA BY ORDER DATED 20/06/1988 AND THE SAID REGISTRATION ST ILL HOLDS GOOD IN VIEW OF THE ORDER PASSED BY THIS TRIBUNAL DATED 31/01/2013, WHICH HAS BEEN SUBSEQUENTLY UPHELD BY HONBLE KARNATAKA HIGH COURT IN ITA NO.261/2013 BY ORDER DATED 07/12/2014. THIS ( TRIBUNAL) WHILE CONSIDERING THE ISSUE FOR ASSESSMENT YEAR 20 10- 11 BEING PRECEDING ASSESSMENT YEARS AND SUBSEQUENT ASSESSMENT YEARS BEING 2013-14 AND 2014-15 BY ORDER DATED 17/06/2019 RELIED UPON FOLLOWING OBSERVATIONS OF TH IS TRIBUNAL FOR ASSESSMENT YEAR 2009-10 REGARDING NON APPLICABI LITY OF PROVISIONS OF SEC.2(15) OF THE ACT: 18. OUR ATTENTION WAS DRAWN TO THE PREAMBLE OF THE KARNATAKA INDUSTRIAL AREAS DEVELOPMENT ACT, 1966 (HEREINAFTER REFERRED T O AS KIAD) UNDER WHICH THE ASSESSEE WAS ESTABLISHED AS A BODY CORPOR ATE, WHICH READS THUS: AN ACT TO MAKE SPECIAL PROVISIONS FOR SECURIN G THE ESTABLISHMENT OF INDUSTRIAL AREAS IN THE STATE OF KARNATAKA AND GEN ERALLY TO PROMOTE THE ESTABLISHMENT AND ORDERLY DEVELOPMENT OF INDUSTRIES THEREIN, AND FOR THAT PURPOSE TO ESTABLISH AN INDUSTRIAL AREAS DEVELOPMEN T BOARD AND FOR PAGE 7 OF 19 ITA NOS.951 & 903/BANG/2017 PURPOSES CONNECTED WITH THE MATTERS AFORESAID. WHER EAS IT IS EXPEDIENT TO MAKE SPECIAL PROVISIONS FOR SECURING THE ESTABLI SHMENT OF INDUSTRIAL AREAS IN THE STATE OF KARNATAKA AND GENERALLY TO PR OMOTE THE ESTABLISHMENT AND THE ORDERLY DEVELOPMENT OF INDUST RIES IN SUCH INDUSTRIAL AREAS, AND FOR THAT PURPOSE TO ESTABLISH AN INDUSTR IAL AREAS DEVELOPMENT BOARD AND FOR PURPOSES CONNECTED WITH THE MATTERS A FORESAID;' 19. HE BROUGHT TO OUR NOTICE THAT IN PURSUANCE OF T HE POWER VESTED UNDER SECTION 5 OF THE KIAD ACT, THE STATE GOVERNMENT HAS NOTIFIED A BOARD CALLED AS THE 'KARNATAKA INDUSTRIAL AREA DEVELOPMEN T BOARD (BOARD IN SHORT) TO ACHIEVE THE OBJECTIVES OF THE KIAD ACT. T HE PURPOSE OF ESTABLISHING THE BOARD IS PROVIDED UNDER SECTION 5(1) OF THE KI. AD ACT, WHICH PROVIDES: 'ESTABLISHMENT AND INCORPORATION.' - FOR THE PURPOS ES OF SECURING THE ESTABLISHMENT OF INDUSTRIAL AREAS IN THE STATE OF K ARNATAKA AND GENERALLY FOR PROMOTING THE RAPID AND ORDERLY ESTABLISHMENT A ND DEVELOPMENT OF INDUSTRIES AND FOR PROVIDING INDUSTRIAL INFRASTRUCT URAL FACILITIES AND AMENITY IN INDUSTRIAL AREAS IN THE STATE OF KARNATA KA, THERE SHALL BE ESTABLISHED BY THE STATE GOVERNMENT BY NOTIFICATION A BOARD BY THE NAME OF THE KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD. ' 20. KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD (K IADB) IS A WHOLLY OWNED INFRASTRUCTURE AGENCY OF GOVERNMENT OF KARNAT AKA. SET UP UNDER KARNATAKA INDUSTRIAL AREAS DEVELOPMENT ACT OF 1966. IT IS ESTABLISHED THROUGH A STATE GOVERNMENT NOTIFICATION. THE ASSESS EE IS A CREATION OF LAW. THE LAW WAS ENACTED WITH CERTAIN SPECIFIC OBJECTIVE S. THUS, THE OBJECTIVES FOR WHICH THE ASSESSEE IS CONSTITUTED WAS LAID OUT EVEN PRIOR TO ITS INCORPORATION. THE ASSESSEE AND ITS ACTIVITIES ARE THEREFORE RING FENCED TO THIS SPECIAL ACT, NAMELY KIAD ACT, 21. THE STATE GOVERNMENT CAN GIVE DIRECTIONS TO THE ASSESSEE, AS IN ITS OPINION, ARE NECESSARY OR EXPEDIENT FOR CARRYING OU T THE PURPOSES OF THE ACT AND IT IS THE DUTY OF THE ASSESSEE TO COMPLY WITH S UCH DIRECTIONS [SECTION 17 OF KIAD ACT]. 22. IT WAS NEXT HIGHLIGHTED THAT THE ASSESSEE CARRI ES ON ITS ACTIVITIES IN ACCORDANCE WITH THE PROVISIONS OF KIAD ACT. IT DOES NOT HAVE THE UNFETTERED POWER TO CARRY ON ITS ACTIVITIES. IT FUNCTIONS WITH IN THE BROAD FRAMEWORK OF THE OBJECTIVES LAID DOWN H THE KIAD ACT. 23. THE WEBSITE OF THE ASSESSEE WHICH OUTLINES ITS AIMS AND OBJECTIVES AND 'FUNCTIONS. IT STATES: 'AIMS & OBJECTIVES: (A) PROMOTE RAPID AND ORDERLY DEVELOPMENT OF INDUSTRIES IN THE STALE. (H) ASSIST IN IMPLEMENTATION OF POLICIES OF GOVERNMENT WITHIN THE PURVIEW OF KIAD A CT. (C) FACILITATE IN ESTABLISHING INFRASTRUCTURE PROJECTS. (D) FUNCTION ON 'NO PROFIT NO LOSS' BASIS. FUNCTIONS: (A) ACQUIRE LAND AND FORM INDUSTR IAL AREAS IN THE STATE. (B) PROVIDE BASIC INFRASTRUCTURE IN THE INDUSTRIAL AREA S. (C) ACQUIRE LAND FOR SINGLE UNIT COMPLEXES. (D) ACQUIRE LAND FOR GOVERNM ENT AGENCIES FOR THEIR SCHEMES AND INFRASTRUCTURE PROJECTS. APPLICATION OF APPELLANT'S FUNDS & PROPERTY. 24. THE FUNDS OF THE ASSESSEE CAN ONLY BE USED AS P ER THE PROVISIONS AND FOR THE PURPOSES OF THE KIADACT, SECTION 8 OF THE A CT PROVIDES THAT ALL PROPERTY AND ALL OTHER ASSETS VESTING IN THE ASSESS EE SHALL BE HELD AND APPLIED BY IT, SUBJECT TO THE PROVISIONS AND FOR TH E PURPOSES OF THIS ACT. THE PAGE 8 OF 19 ITA NOS.951 & 903/BANG/2017 PURPOSE OF APPLICATION IS OUTLINED. THE FUNDS CANNO T BE DISTRIBUTED OR APPROPRIATED TO ANY PERSON UNLESS THE SAME IS IN AC CORDANCE WITH THE ASSESSEE'S OBJECTIVES. THE EMPLOYMENT UTILIZATION A ND CHANNELIZING OF FUNDS CAN BE DONE WITHIN THE BROAD FRAMEWORK OF THE ASSESSEE'S OBJECTIVES. ACQUISITION AND DEVELOPMENT OF LANDS 25. THE ACQUISITION SECTION (ONE OF THE WINGS OF TH E ASSESSEE) CONDUCTS THE PROCEEDINGS FOR ACQUISITION OF LAND AS PER KIAD ACT AND HANDS THESE LANDS TO KIADB. SPECIAL DEPUTY COMMISSIONER HEADS ACQUISI TION WING. HE IS ASSISTED BY SPECIAL LAND ACQUISITION OFFICERS AT ZO NAL LEVEL. THE BOARD DOES NOT HAVE THE POWER TO ACQUIRE LAND OF ITS CHOI CE; DEVELOP IT AND THEN SELL IT: UNDER SECTION 3 OF KIAD ACT, IT IS ONLY TH E STATE GOVERNMENT WHICH CAN DECLARE ANY AREA AS AN INDUSTRIAL AREA BY A NOT IFICATION, AND SPECIFY THE LIMITS OF SUCH AREA. THUS, THE BOARD'S ACQUISIT ION POWERS ARE RING FENCED BY THE STATE GOVERNMENT'S AUTHORITY. AS PER SECTION 28 OF KIAD ACT, THE STATE GOVERNMENT CAN ACQUIRE LAND, FOR THE PURP OSE OF DEVELOPMENT, AND PAY COMPENSATION FOR SUCH COMPULSORY ACQUISITIO N. THE BOARD CANNOT DECIDE WHAT LAND TO ACQUIRE AND HOW MUCH TO COMPENS ATE THE LAND OWNERS. IT IS ONLY WHEN AN AREA IS DECLARED AS AN I NDUSTRIAL AREA AND THE LAND IS ACQUIRED UNDER SECTION 28 OF MAD ACT OR TRA NSFERRED BY THE GOVERNMENT UNDER SECTION 32 OF THE KIAD ACT, THAT T HE ROLE OF THE BOARD BEGINS. RESTRAINT ON EXPENDITURE FROM FUNDS OF THE ASSESSEE 26. SECTION 23 STIPULATES THAT THE ASSESSEE SHALL H AVE THE AUTHORITY TO SPEND SUCH SUMS AS IT THINKS FIT FOR THE PURPOSES A UTHORISED UNDER THIS ACT FROM OUT OF BOARD'S FUNDS, EVERY EXPENSE HAS TO THE REFORE PASS THE 'PURPOSE TEST'. 27. IT WAS ARGUED BY ID. COUNSEL FOR THE ASSESSEE T HAT IN THE PRESENT CASE, THE ASSESSEE IS PRIMARILY ENGAGED IN 'PROMOTION OF INDUSTRIAL GROWTH IN KARNATAKA'. IT IS NOT COVERED WITHIN ANY OF THE SPE CIFIC CATEGORIES ENLISTED IN SECTION 2(15). THE QUESTION THEREFORE IS WHETHER THE ASSESSEE'S OBJECTIVE IS COVERED WITHIN THE PHRASE 'ADVANCEMENT OF ANY OT HER OBJECT OF GENERAL PUBLIC UTILITY'? 28. THE OBJECTIVES OF THE ASSESSEE ARE EXPLICIT AND CANNOT HE CIRCUMVENTED. THE ASSESSEE IS A CREATION OF LAW, IT IS NOT FORMED OR SET-UP BY ANY PERSON(S) FOR ANY PECUNIARY BENEFIT OR COMMERCIAL M OTIVE. THE ASSESSEE OWES ITS GENESIS TO KIAD ACT, A STATE GOVERNMENT LE GISLATION. THE ASSESSEE'S INCORPORATION. FUNCTIONING, POWERS AND S COPE ARE SET OUT IN THE KIAD ACT. BEING A CREATION OF A SPECIAL LAW, COMPLI ANCE WITH THE PROVISIONS THEREIN IS MANDATORY. THE STATUTE REPEATEDLY EMPHAS IZES THE NEED TO CARRY ON ACTIVITIES HAVING REGARD TO THE OBJECTS OF THE A CT. THE OBJECT IS PROMOTION OF INDUSTRIES. IT ASSISTS IN IMPLEMENTATION OF POLI CES OF GOVERNMENT WITHIN E PURVIEW OF KIAD ACT. THERE IS ESTABLISHMENT OF INFR ASTRUCTURE PROJECTS. ABOVE ALL, IT UNDER DIRECT SURVEILLANCE OF STATE GO VERNMENT. 29. INDUSTRIALIZATION IS AN INITIATION OF SOCIAL RE FORM AND ECONOMIC DEVELOPMENT. IT BOASTS THE PRODUCTION AND MANUFACTU RING SEGMENTS. EMPLOYMENT WOULD SCALE UP; EFFICIENCIES STAND ENHAN CED AND STANDARDIZATION BECOMES ACHIEVABLE. ALL THESE TRANS FORMATIONS TRANSLATE INTO OVERALL AMELIORATION OF THE SOCIETY AND COUNTR Y AS A WHOLE. AN PAGE 9 OF 19 ITA NOS.951 & 903/BANG/2017 INSTITUTION WITH SUCH A FAR SIGHTED AND DEVELOPMENT ORIENTED OBJECTIVE IS CERTAINLY ONE WHICH BENEFITS THE PUBLIC AT LARGE. T HE ASSESSEE SERVES THE CAUSE OF GENERAL PUBLIC UTILITY AND IS THEREFORE CO VERED WITHIN THE GAMUT OF 'CHARITABLE PURPOSE' AS DEFINED BY SECTION 2(15) OF THE L.T. ACT. 30. IN THE COURSE OF CARRYING ON ITS ACTIVITIES, TH E BENEFIT ARISING FROM SUCH PROMOTION MAY BE SHARED BY THOSE ENGAGED IN THE IND USTRIAL SECTOR. THE BENEFIT TO THESE CANNOT DETER THE CLAIM OF THE ASSE SSEE TO BE A 'CHARITABLE INSTITUTION', IN THE WORDS OF THE APEX COURT IN THE CASE OF CIT V ANDHRA CHAMBER OF COMMERCE (1965) 55 1TR 722 (SC): 'THE PR INCIPAL OBJECTS OF THE ASSESSEE ARE TO PROTECT, TRADE, COMMERCE AND IN DUSTRIES AND TO AID, STIMULATE AND PROMOTE THE DEVELOPMENT OF TRADE, COM MERCE AND INDUSTRIES IN INDIA OR ANY PART THEREOF. BY THE ACHIEVEMENT OF THESE OBJECTS, IT IS NOT INTENDED TO SERVE MERELY THE INTERESTS OF THE MEMBE RS OF THE ASSESSEE. ADVANCEMENT OR PROMOTION OF TRADE, COMMERCE AND IND USTRY LEADING TO ECONOMIC PROSPERITY ENSURES THE BENEFIT OF THE ENTI RE COMMUNITY. THAT PROSPERITY WOULD BE SHARED ALSO BY THOSE: WHO ENGAG E IN TRADE, COMMERCE AND INDUSTRY BUT ON THAT ACCOUNT THE PURPOSE IS NOT RENDERED ANY THE LESS AN OBJECT OF GENERAL PUBLIC UTILITY. IT MAY BE REME MBERED THAT PROMOTION AND PROTECTION OF TRADE, COMMERCE AND INDUSTRY CANN OT BE EQUATED WITH PROMOTION AND PROTECTION OF ACTIVITIES AND INTEREST S MERELY OF PERSONS ENGAGED IN TRADE, COMMERCE AND INDUSTRY.' 31. IT WAS SUBMITTED THAT THE AO IN HIS ORDER HAS O BSERVED THAT THE ASSESSEE HAS CARRIED OUT THE ACTIVITIES/RENDERED SE RVICES TO INDUSTRIALISTS/ ENTREPRENEURS IN LIEU OF WHICH IT COLLECTED/RECEIVE D CONSIDERATION TOWARDS SALE OF INDUSTRIAL SITES AND FEES FOR VARIOUS SERVI CES RENDERED THEREOF. THESE ARE NOT SERVICES RENDERED TO SPECIFIC INDUSTR IALISTS/ENTREPRENEURS. THE OBJECTIVE IS NOT 'SERVICE OF INDIVIDUAL INDUSTR IAL HOUSES' BUT PROMOTION OF OVERALL INDUSTRIALIZATION OF KARNATAKA. AN INCID ENTAL BENEFIT TO SOME INDUSTRIALISTS/ENTREPRENEURS WOULD NOT DILUTE THE P ROGRESSIVE AND CHARITABLE OBJECTIVE OF THE ASSESSEE. 32. TO SUMMARIZE, THE LD. COUNSEL SUBMITTED THAT TH E ASSESSEE PLAYS A VITAL ROLE IN SUPPLEMENTING THE GOVERNMENTAL EFFORT S IN BOOSTING INDUSTRIALIZATION. THE ASSESSEE IS A CREATION OF LA W CONSTITUTED FOR THE PURPOSE OF DEVELOPMENT OF INDUSTRIES AND EXISTS FOR PUBLIC GOOD. ITS CONTROL AND MANAGEMENT IS VESTED WITH THE STATE GOVERNMENT. THE BENEFIT ARISING FROM ITS ACTIVITIES MAY BE SHARED BY PERSONS ENGAGE D IN THE INDUSTRIAL SECTOR. THIS HOWEVER DOES NOT DETRACT FROM ITS CHAR ITABLE CHARACTER. THE OBJECT OF THE ASSESSEE IS CLEAR; THE FUNCTIONS ARE RING FENCED AND POWERS ARE FRAME ALL WITH A VIEW TO ACHIEVE INDUSTRIAL DEV ELOPMENT IN KARNATAKA. DEVELOPMENT OF INDUSTRIES HAS BEEN CONSTRUED TO BE 'ADVANCEMENT OF GENERAL PUBLIC UTILITY' BY THE APEX COURT, ACTIVITI ES OF THE ASSESSEE ARE THEREFORE TO BE REGARDED AS COVERED WITHIN THE OPER ATIVE PROVISIONS OF SECTION 2(15). 33. IT WAS ALSO SUBMITTED THAT ASSESSEE HAS CONTINU OUSLY DEVOTED ITSELF TO THE PROMOTION OF INDUSTRIES IN THE STATE OF KARNATA KA. IT HAS NOT BEEN FORMED AND IS NOT CARRYING ON ACTIVITIES WITH A MOT IVE TO DISTRIBUTE ITS SURPLUS. THERE IS NO INTENTION TO MAKE PROFITS. THE OBJECTS ARE TO CARRY OUT INDUSTRIAL AND INFRASTRUCTURE PROMOTION. THE SURPLU S, IF ANY, ARISING FROM PAGE 10 OF 19 ITA NOS.951 & 903/BANG/2017 THE ACTIVITIES ARE SOLELY UTILIZED FOR THE ACHIEVEM ENT OF ITS OBJECTS AND NO PORTION IS UTILIZED FOR DISTRIBUTION OF ANY INCOME OR PROFITS. IN SUBSTANCE, THE ASSESSEE NEITHER EARNS ANY PROFITS NOR IS IT INVOLV ED IN THE ACTIVITIES OF TRADE, COMMERCE OR BUSINESS. THE ACTIVITIES OF ASSE SSEE ARE THEREFORE CHARITABLE IN NATURE. 34. AS ALREADY MENTIONED, ASSESSEE OPERATES ON A NO PROFIT OR NO LOSS BASIS. THIS IS EVIDENT FROM THEIR PRICING MECHANISM . THE ASSESSEE ACQUIRES AGRICULTURAL LAND FROM THE FARMERS BY PAYING COMPEN SATION TO THE FARMERS. SUCH COMPENSATION IS DETERMINED BY DEPUTY COMMISSIO NER OF DISTRICT. SUCH LAND WOULD BE DEVELOPED INTO PLOTS FOR THE PUR POSES OF PROJECTS APPROVED BY STATE HIGH LEVEL CLEARANCE COMMITTEE (H EADED BY CHIEF MINISTER). STATE LEVEL SINGLE WINDOW CLEARANCE COMM ITTEE IS HEADED BY CHIEF SECRETARY. GOVT. OF KARNATAKA AND DISTRICT LE VEL SINGLE WINDOW CLEARANCE COMMITTEE IS HEADED BY THE DEPUTY COMMISS IONERS OF THE DISTRICTS. 35. THE ASSESSEE PREPARES A BUDGET FOR COMPENSATION PAYABLE FOR LAND ACQUISITION AND DEVELOPMENT EXPENDITURE THEREON. TO TAL PRICING OF LAND WOULD PRIMARILY INCLUDE COST OF LAND ACQUISITION AN D TOTAL DEVELOPMENT COST AND 12.75% INTEREST FOR ONE YEAR ALONG WITH ESTABLI SHMENT & BOARD SERVICE CHARGES TOWARDS MAINTENANCE OF THE BOARD. T HE COMPUTATION OF TOTAL COST OF ACQUISITION AND DEVELOPMENT IS TABULA TED BELOW: COMPUTATION OF TOTAL COST OF ACQUISITION AND DEVELO PMENT (A) LAND COMPENSATION PAYABLE TO OWNERS (B) COMPENSATION FOR COST OF STRUCTURES, WELLS ETC ON THE LAND (A+B) COST OF LAND (C) ESTABLISHMENT CHARGES AT 11% ON (A+B) (D) INTEREST AT 12.75% P.A ON (A+B) (E) TOTAL COST OF ACQUISITION (A+B+C+D) (F) DEVELOPMENT COST FOR FORMATION OF LAYOUT (ROAD, DRAINAGE, WATER SUPPLY, PARKS ETC) (G) BOARD SERVICE CHARGES AT 10% ON (F) (I) INTEREST CHARGED BY THE BOARD AT 12.75% P.A ON (F) (J) TOTAL COST OF DEVELOPMENT (F+G+I) (K) TOTAL COST OF ACQUISITION AND DEVELOPMENT [(E)+ (J)] 36. ONCE THE TOTAL COST IS SO COMPUTED, IT IS ALLOC ATED TO THE ALLOTABLE EXTENT OF THE LAND (GENERALLY AROUND 65 TO 70% OF LAND). T HEREAFTER ALLOTMENT OF PLOTS IS CARRIED ON TO THE ENTREPRENEURS FOR THE ST ATE / DISTRICT APPROVED PROJECTS AT THE SAME PRICE. THERE IS NO MARGIN INCL UDED. THE OBJECTIVE IS NOT TO EARN PROFITS ON ALLOTMENT OF SUCH PLOT OF LAND. THE EXCESS OF INCOME OVER EXPENDITURE OR THE SURPLUS REMAINING IN THE FINANCI AL STATEMENTS OF THE BOARD PRIMARILY ARISES ON ACCOUNT OF BANK INTERESTS . THESE ARE EXCESS FUNDS AVAILABLE WITH THE BOARD WHICH ARE HOUSED WIT H THE BANKS TO GENERATE PASSIVE INTEREST INCOME. THUS, THE CORE AC TIVITY OF INDUSTRIALIZATION OF LANDS (THE ALLEGED BUSINESS AC TIVITY) DOES NOT FETCH PROFITS; THE SOURCE OF INCOME WHICH GENERATES SURPL US IS FROM BANK PAGE 11 OF 19 ITA NOS.951 & 903/BANG/2017 INTERESTS AND THEREBY NOT GENERATED ON ACCOUNT OF B OARDS NORMAL COURSE OF ACTIVITIES. 37. IN VIEW OF ALL THE ABOVE, IT WAS SUBMITTED BY T HE ID. COUNSEL FOR THE ASSESSEE THAT THE ACTION OF THE AD AFFIRMED BY CIT( A) THAT THE ACTIVITIES OF THE ASSESSEE ARE COMMERCIAL IN NATURE THEREBY ATTRA CTING THE PROVISO TO SECTION 2(15) IS INCORRECT, CONTRARY TO FACTS, BAD IN LAW AND LIABLE TO BE QUASHED. 38. WITHOUT PREJUDICE, THE ASSESSEE SUBMITS THAT EL EEMOSYNARY ELEMENT IS NOT ESSENTIAL ELEMENT OF CHARITY. IT IS ALSO NOT A NECESSARY ELEMENT IN A CHARITABLE PURPOSE THAT IT SHOULD PROVIDE SOMETHING FOR NOTHING OR FOR LESS THAN IT COSTS OR FOR LESS THAN THE ORDINARY PRICE. THE SURPLUS GENERATED. IF IT IS HELD AND APPLIED FOR CHARITABLE PURPOSE, THE ASS ESSEE HAS TO BE CONSIDERED AS EXISTING FOR A CHARITABLE PURPOSE, TH E DECISIONS IN KRUPANIDHI EDUCATIONAL TRUST V DIT(E), ITA NO. 86/2 012 DT. 14.92012 - BANGALORE ITAT; LOKA SHIKSHANA TRUST V CIT [1975] 1 01 ITR 234 (SC), CRICKET ASSOCIATION OF BENGAL V CIT [1959] 37 ITR 2 77 (CAL), CIT V. BREACH CANDY SWIMMING BATH TRUST (1955) 27 ITR 279 (BORN), THE TRUSTEES OF THE TRIBUNE, IN RE (1939) 7 HR 423 (PC) AND PARA NO, 19 PAGE NO. 528 - VOLUME I OF THE LAW AND PRACTICE OF INCOME TAX BY KANGA, P ALKHIVALA AND VYAS WAS RELIED UPON IN SUPPORT OF THE ABOVE PRINCIPLE. DIFFERENCE BETWEEN 'BUSINESS ACTIVITY' AND 'ACTIVITY WITH BUSINESS PRI NCIPLES' 39. THERE IS A SUBTLE DIFFERENCE BETWEEN THE PHRASE 'CARRYING ON ACTIVITIES IN THE NATURE OF BUSINESS AND CARRYING ON ACTIVITI ES ON BUSINESS PRINCIPLES'. THE FORMER REFERS TO ACTIVITY ITSELF A SSUMING CHARACTER OF BUSINESS AND THE LATTER REFERS TO ACTIVITY CARRIED ON FOR A DIFFERENT PURPOSE BUT WITH THE ACUMEN OF BUSINESS WORLD. THE LATTER I NDICATES THE IMPORT OF BUSINESS KIND EFFICIENCY IN CARRYING OUT ACTIVITIES . IT IS AN EVIDENCE OF BEING ORGANIZED AND CARRYING ON ACTIVITIES IN A STRUCTURE D AND EFFICIENT MANNER, 40. MERE ADOPTION OF 'BUSINESS PRINCIPLES' DOES NOT TRANSFORM A CHARITABLE INSTITUTION INTO A BUSINESS ENTITY. THE APEX COURT HAS ECHOED SIMILAR VIEW IN THE CASE OF CIT V ANDHRA PRADESH STATE ROAD TRAN SPORT (1986) 159 ITR I (SC) WHEREIN HE COURT OBSERVED AS UNDER: 'NO ACTIVITY CAN BE CARRIED ON EFFICIENTLY, PROPERL Y, ADEQUATELY OR ECONOMICALLY UNLESS IT IS CARRIED ON BUSINESS PRINC IPLES. IF AN ACTIVITY IS CARRIED ON BUSINESS PRINCIPLES, IT WOULD USUALLY RE SULT IN PROFIT, BUT, AS POINTED OUT BY THIS COURT IN SURAT ART SILK CLOTH M ANUFACTURERS ASSOCIATIONS CASE (1980) 120 ITR ('SC'), IT IS NOT POSSIBLE SO T O CARRY ON A CHARITABLE ACTIVITY IN SUCH A WAY THAT THE EXPENDITURE BALANCE S THE INCOME AND THERE IS NO RESULTANT PROFIT, FOR, TO ACHIEVE THIS, WOULD NOT ONLY BE DIFFICULT OF PRACTICAL REALISATION BUT WOULD REFLECT UNSOUND PRI NCIPLES OF MANAGEMENT.' (EMPHASIS SUPPLIED) 41 IN THE PRESENT CASE, THE ASSESSEE HAS CARRIED ON ITS ACTIVITIES ON BUSINESS PRINCIPLES AND SOUND PRINCIPLES OF MANAGEM ENT. AS A RESULT, THE ASSESSEE HAS BEEN ABLE TO REPEATEDLY GENERATE SURPL US FUNDS. THIS FACT BY ITSELF DOES NOT RENDER THE ASSESSEE A 'NON-CHARITAB LE ENTITY; BUT ONLY IS AN EXECUTION OF SOUND MANAGEMENT PRINCIPLES BY A CHARI TABLE ORGANISATION. THE ASSESSEE UNDERTAKES DEVELOPMENT OF INDUSTRIES A ND INFRASTRUCTURE IN THE STATE OF KARNATAKA. IT IS NOT CARRYING ON BUSIN ESS; BUT EXECUTING THE PAGE 12 OF 19 ITA NOS.951 & 903/BANG/2017 TASKS ASSIGNED BY THE STATE GOVERNMENT UNDER THE KI AD LEGISLATION. THERE IS NO OCCASION FOR THE OFFICE BEARERS TO TAKE THE ' PROFIT MAKING' ROUTE AS THE FUNDS AND THEIR DEPLOYMENT IS UNDER THE SURVEILLANC E OF THE STATE GOVERNMENT (THROUGH ITS OFFICE BEARERS/PUBLIC SERVA NTS). TO CONCLUDE, THE ACTIVITIES OF THE ASSESSEE DO NOT CONSTITUTE BUSINE SS. 42. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED T O SEVERAL JUDICIAL PRONOUNCEMENTS. WE WILL MAKE A REFERENCE TO THOSE D ECISIONS AT THE APPROPRIATE PLACE, TO THE EXTENT IT IS NECESSARY TO DISPOSE THIS APPEAL. 43. THE LEARNED DR PLACED STRONG RELIANCE ON THE FI NDINGS OF THE AO IN THE ORDER OF ASSESSMENT AND THE ORDER OF THE CIT(A). 44. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO T HE RIVAL SUBMISSIONS. THE PURPOSE FOR WHICH THE ASSESSEE EXISTS IS FOR TH E 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY'. THE FACT T HAT THE ASSESSEE ENJOYED REGISTRATION U/S.12AA OF THE ACT IN THE PAST IS ITS ELF SUFFICIENT TO COME TO THIS CONCLUSION. THE WITHDRAWN OF REGISTRATION U/S. 12AA OF THE ACT WAS ONLY CONSEQUENT TO THE INTRODUCTION OF THE PROVISO TO SEC.2(15) OF THE ACT BY THE FINANCE ACT, 2008. THEREFORE THE QUESTION THAT WE NEED TO BE ANSWERED IS AS TO WHETHER THE PROVISO TO SEC.2(15) OF THE ACT WOULD BE APPLICABLE TO THE CASE OF THE ASSESSEE. 45. WE SHALL NOW UNDERSTAND THE APPROACH TO BE ADOP TED IN COMING TO THE CONCLUSION AS TO WHETHER THE PROVISO TO SEC.2(15)' 1THE ACT WILL BE APPLICABLE TO THE ASSESSEE IN THE LIGHT OF THE DECI SION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF INDIA TRADE PROMOTION ORG ANIZATION VS. DGFT( EXEMPTION) AND OTHERS 371 ITR 333 (DELHI). THE LEAR NED COUNSEL FOR THE ASSESSEE HAS PLACED STRONG RELIANCE ON THIS DECISIO N TO SUPPORT HIS PLEA THAT THE PROVISO TO SEC.2(15) OF THE ACT IS NOT APP LICABLE TO ASSESSEE. THE FACTS OF THE CASE BEFORE THE HON'BLE DELHI HIGH COU RT IN THE CASE OF INDIA TRADE PROMOTION ORGANIZATION (SUPRA) WAS THAT THE A SSESSEE IN THAT CASE ENJOYED THE BENEFIT OF EXEMPTION U/SJ0(23C)(IV) OF THE ACT. SEC.10(23C)(IV) PROVIDES ANY INCOME RECEIVED BY ANY PERSON ON BEHAL F OF ANY OTHER FUND OR INSTITUTION ESTABLISHED FOR CHARITABLE PURPOSES WHI CH MAY BE APPROVED BY THE PRESCRIBED AUTHORITY, HAVING REGARD TO THE OBJE CTS OF THE FUND OR INSTITUTION AND ITS IMPORTANCE THROUGHOUT INDIA OR THROUGHOUT ANY STATE OR STATES, SHALL NOT FORM PART OF THE TOTAL INCOME UND ER THE ACT. THE PRESCRIBED AUTHORITY WITHDREW THE APPROVAL GRANTED TO THE ASSE SSEE CONSEQUENT TO THE INSERTION OF THE PROVISO TO SEC.2(15) OF THE ACT., ON THE GROUND THAT THE ASSESSEE WAS DERIVING RENTAL INCOME FROM LETTING OU T SPACE FOR RENT DURING TRADE FAIRS AND EXHIBITIONS, WAS DERIVING INCOME FR OM SALE OF TICKETS AND INCOME FROM FOOD AND BEVERAGE OUTLETS. THE SAID WIT HDRAWAL WAS CHALLENGED BY THE ASSESSEE BEFORE THE HON'BLE DELHI HIGH COURT. THE HON'BLE DELHI HIGH COURT HAD TO GO INTO THE QUESTIO N AS TO THE SCOPE OF THE PROVISO TO SEC.2(15) OF THE ACT, THE HON'HLE DELHI HIGH COURT HAS LAID DOWN THE FOLLOWING VERY IMPORTANT PRINCIPLES AS TO HOW T HE PROVISO TO SEC.2(15) OF THE ACT HAS TO BE INTERPRETED- (I) THE PROVISO TO SEC.2(15) OF THE ACT INTRODUCED BY VIRTUE OF THE FINANCE ACT, 2008 WITH EFFECT FROM 01.04.2009 HAS TWO PARTS , THE FIRST PART HAS REFERENCE TO THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. THE SECOND PART HAS REFERENCE TO ANY A CTIVITY OF RENDERING ANY PAGE 13 OF 19 ITA NOS.951 & 903/BANG/2017 SERVICE 'IN RELATION TO ANY TRADE, COMMERCE OR BUS INESS. BOTH THESE PARTS ARE FURTHER SUBJECT TO THE CONDITION THAT THE ACTIV ITIES SO CARRIED OUT ARE FOR A CESS OR FEE OR ANY OTHER CONSIDERATION, IRRESPECT IVE OF THE NATURE OR USE OR APPLICATION OR RETENTION OF THE INCOME FROM SUCH AC TIVITIES. IN OTHER WORDS, IF, BY VIRTUE OF A CESS' OR FEE' OR ANY OTHER CONSI DERATION, INCOME IS GENERATED BY ANY OF THE TWO SETS OF ACTIVITIES REFE RRED TO ABOVE, THE NATURE OF USE OF SUCH INCOME OR APPLICATION OR RETENTION O F SUCH INCOME IS IRRELEVANT FOR THE PURPOSES OF CONSTRUING THE ACTIV ITIES AS CHARITABLE OR NOT. (II) IF AN ACTIVITY IN THE NATURE OF TRADE, COMMERC E OR BUSINESS IS CARRIED ON AND IT GENERATES INCOME, THE FACT THAT SUCH INCOME IS APPLIED FOR CHARITABLE PURPOSES, WOULD NOT MAKE ANY DIFFERENCE AND THE ACT IVITY WOULD NONETHELESS NOT BE REGARDED AS BEING CARRIED ON FOR A CHARITABLE PURPOSE. IF A LITERAL INTERPRETATION IS TO BE GIVEN TO THE P ROVISO, THEN IT MAY BE CONCLUDED THAT THIS FACT WOULD HAVE NO BEARING ON D ETERMINING THE NATURE OF THE ACTIVITY CARRIED ON BY THE PETITIONER. BUT, IN DECIDING WHETHER ANY ACTIVITY IS IN THE NATURE OF TRADE, COMMERCE OR BUS INESS, IT HAS TO BE EXAMINED WHETHER THERE IS AN ELEMENT OF PROFIT MAKI NG OR NOT. SIMILARLY, WHILE CONSIDERING WHETHER ANY ACTIVITY IS ONE OF RE NDERING ANY SERVICE IN, RELATION TO ANY TRADE, COMMERCE OR BUSINESS, THE EL EMENT OF PROFIT MAKING IS ALSO VERY IMPORTANT. (III) THE MEANING OF THE EXPRESSION CHARITABLE PURP OSES' HAS TO BE EXAMINED IN THE CONTEXT OF 'INCOME', BECAUSE, IT IS ONLY WHEN THERE IS INCOME THE QUESTION OF NOT INCLUDING THAT INCOME IN THE TOTAL INCOME WOULD ARISE. THEREFORE, MERELY BECAUSE AN INSTITUTION, WH ICH OTHERWISE IS ESTABLISHED FOR A CHARITABLE PURPOSE, RECEIVES INCO ME WOULD NOT MAKE IT ANY LESS A CHARITABLE INSTITUTION. WHETHER THAT INS TITUTION, WHICH IS ESTABLISHED FOR CHARITABLE PURPOSES, WILL GET THE E XEMPTION WOULD HAVE TO BE DETERMINED HAVING REGARD TO THE OBJECTS OF THE I NSTITUTION AND ITS IMPORTANCE THROUGHOUT INDIA OR THROUGHOUT ANY STATE OR STATES. (IV) MERELY, BECAUSE AN INSTITUTION DERIVES INCOME OUT OF ACTIVITIES WHICH MAY BE COMMERCIAL, THAT DOES, IN ANY WAY, AFFECT TH E NATURE OF THE INSTITUTION AS A CHARITABLE INSTITUTION IF IT OTHER WISE QUALIFIES FOR SUCH A CHARACTER. (V) MERELY BECAUSE A FEE OR SOME OTHER CONSIDERATIO N IS COLLECTED OR RECEIVED BY AN INSTITUTION, IT WOULD NOT LOSE ITS C HARACTER OF HAVING BEEN ESTABLISHED FOR A CHARITABLE PURPOSE. IF THE DOMINA NT ACTIVITY OF THE INSTITUTION WAS NOT BUSINESS, TRADE OR COMMERCE, TH EN ANY SUCH IN DENTAL OR ANCILLARY ACTIVITY WOULD ALSO NOT FALL WITHIN TH E CATEGORIES OF TRADE, COMMERCE OR BUSINESS. IF THE DRIVING FORCE IS NOT T HE DESIRE TO EARN PROFITS BUT TO DO CHARITY, THE EXCEPTION CARVED OUT IN THE FIRST PROVISO TO SECTION 2(15) OF THE SAID ACT WOULD NOT APPLY. (VI) IF A LITERAL INTERPRETATION WERE TO BE GIVEN T O THE SAID PROVISO, THEN IT WOULD RISK BEING HIT BY ARTICLE 14 (THE EQUALITY CL AUSE ENSHRINED IN ARTICLE 14 OF THE CONSTITUTION). COURTS SHOULD ALWAYS ENDEA VOUR TO UPHOLD THE CONSTITUTIONAL VALIDITY OF A PROVISION AND, IN DOIN G SO, THE PROVISION IN QUESTION MAY HAVE TO BE READ DOWN, AS POINTED OUT A BOVE. (VII) SECTION 2(15) IS ONLY A DEFINITION CLAUSE. SE CTION 2 BEGINS WITH THE WORDS, IN THIS ACT, UNLESS THE CONTEXT OTHERWISE R EQUIRES. THE EXPRESSION PAGE 14 OF 19 ITA NOS.951 & 903/BANG/2017 'CHARITABLE PURPOSE APPEARING IN SECTION 2(15) OF T HE SAID ACT HAS TO BE SEEN IN THE CONTEXT OF SECTION 10(23C)(IV). WHEN TH E EXPRESSION CHARITABLE PURPOSE, AS DEFINED IN SECTION 2(15) OF THE SAID AC T, IS READ IN THE CONTEXT OF SECTION 10(23C)(IV) OF THE SAID ACT, WE WOULD HA VE TO GIVE UP THE STRICT AND LITERAL INTERPRETATION SOUGHT TO BE GIVEN TO TH E EXPRESSION 'CHARITABLE PURPOSE BY THE REVENUE. (VIII). THE EXPRESSION 'CHA RITABLE PURPOSE', AS DEFINED IN SECTION 2(15) CANNOT BE CONSTRUED LITERA LLY AND IN ABSOLUTE TERMS. THE CORRECT INTERPRETATION OF THE PROVISO TO SECTION 2(15) OF THE SAID ACT WOULD BE THAT IT CARVES OUT AN EXCEPTION FROM T HE CHARITABLE PURPOSE OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY AND THAT EXCEPTION IS LIMITED TO ACTIVITIES IN THE NATURE OF TRADE, CO MMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO AN Y TRADE, COMMERCE OR BUSINESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATI ON. IN BOTH THE ACTIVITIES, IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR THE ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR B USINESS, THE DOMINANT AND THE PRIME OBJECTIVE HAS TO BE SEEN. IF THE DOMI NANT AND PRIME OBJECTIVE OF THE INSTITUTION, WHICH CLAIMS TO HAVE BEEN ESTAB LISHED FOR CHARITABLE PURPOSES, IS PROFIT MAKING, WHETHER ITS ACTIVITIES ARE DIRECTLY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR INDIRECTLY IN THE RENDERING OF ANY SERVICE IN RELATION TO ANY TRADE COMMERCE OR BUSINESS, THEN IT WOULD NOT BE ENTITLED TO CLAIM ITS OBJECT TO BE A 'CHARITABLE PURPOSE'. O N THE FLIP SIDE, WHERE AN INSTITUTION IS NOT DRIVEN PRIMARILY BY A DESIRE OR MOTIVE TO EARN PROFITS, BUT TO DO CHARITY THROUGH THE ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY, IT CANNOT BUT BE REGARDED AS AN INSTITUTION ESTABLI SHED FOR CHARITABLE PURPOSES. (EMPHASIS SUPPLIED) 46. IT CAN BE SEEN FROM THE VARIOUS PROVISIONS OF T HE MAD ACT WHICH WE HAVE SET OUT IN THE EARLIER PART OF THE ORDER THAT THE DOMINANT AND PRIME OBJECTIVE OF THE ASSESSEE IS NOT PROFIT MAKING. PRI OR TO THE INTRODUCTION OF THE PROVISO TO SECTION 2(15) OF THE ACT, THERE WAS NO DISPUTE THAT THE ASSESSEE WAS ESTABLISHED FOR CHARITABLE PURPOSES. W E SHALL NOW TAKE A LOOK AT THE INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31.12009 OF THE ASSESSEE. THE INCOME SIDE OF THE ACCOUNT SHO WS THAT THE MAIN COMPONENT OF INCOME OF THE ASSESSEE IS DERIVED IN T HE FORM OF INTEREST OF RS.13117 CRORES. SCHEDULE 'PA TO THE INCOME AND EXP ENDITURE ACCOUNT SHOWS THE BREAKUP OF THE INTEREST RECEIPT BY THE AS SESSEE. THE INTEREST ON FIXED DEPOSITS IS RS.120.90 CRORES. THE EARNEST MON EY DEPOSIT GIVEN BY THE ALLOTTEES ARE PARKED BY THE ASSESSEE IN FIXED D EPOSIT AND THOSE DEPOSITS HAS EARNED THE AFORESAID INTEREST INCOME. THEREFORE THERE CAN BE NO PROFIT ELEMENT IN EARNING THIS INTEREST INCOME. BESIDES THE ABOVE, THE OTHER COMPONENTS OF INTEREST ARE INTEREST FROM ALLO TTEES, PENAL INTEREST FROM ALLOTTEES, INTEREST ON STAFF LOAN, INTEREST FROM SB AND OTHERS, INTEREST ON SEED MONEY, DIVIDEND RECEIVED AND INTEREST ON INCOM E TAX REFUND. THE OTHER COMPONENT OF INCOME IS GAIN ON DISPOSAL OF LA ND, SALE OF APPLICATION FORMS, RECOVERIES OF FINES AND PENALTIES, INTEREST, OTHER RECEIPTS, RENT, FORFEITURE OF DEPOSITS, WATER SUPPLY CHARGES. THE I NCOME FROM SALE OF LAND IS RS.18.69 CRORES. THE EXPENDITURE INCURRED BY THE ASSESSEE COMPRISES OF REPAIRS AND MAINTENANCE, ADMINISTRATIVE EXPENSES, W ATER AND ELECTRICITY CHARGES, SPECIAL AND OTHER CHARGES, DEPRECIATION. I F THE GAIN ON DISPOSAL OF PAGE 15 OF 19 ITA NOS.951 & 903/BANG/2017 LAND OF RS.18.69 CRORES WHICH IS THE PRIMARILY OBJE CT OF THE ASSESSEE AND EXPENDITURE IN THE FORM OF ADMINISTRATIVE EXPENSES OF RS.15.42 CRORES AND 10.61 CRORES WHICH ARE FIXED EXPENSES AND NECESSARY TO CARRY ON THE PRIMARY OBJECT ALONE ARE CONSIDERED THAN THERE WOUL D BE LOSS. THIS BY ITSELF WOULD DEMONSTRATE THAT THE ASSESSEE DOES NOT EXIST FOR PROFIT. 47. THE MAIN AIM AND OBJECT FOR WHICH THE ASSESSEE WAS ESTABLISHED IS TO (A) PROMOTE RAPID AND ORDERLY DEVELOPMENT OF INDUST RIES IN THE STALE. (B)ASSIST IN IMPLEMENTATION OF POLICIES OF GOVERNME NT WITHIN THE PURVIEW OF MAD ACT. (C) FACILITATE IN ESTABLISHING INFRASTRUCT URE PROJECTS.(D)FUNCTION ON 'NO PROFIT - NO LOSS' BASIS, FOR THE ABOVE PURPOSE, THE ASSESSEE (A)ACQUIRE LAND AND FORM INDUSTRIAL AREAS IN THE STATE. (B)PRO VIDE BASIC INFRASTRUCTURE IN THE INDUSTRIAL AREAS.() ACQUIRE LAND FOR SINGLE UNIT COMPLEXES. (D)ACQUIRE LAND FOR GOVERNMENT AGENCIES FOR THEIR S CHEMES AND INFRASTRUCTURE PROJECTS, THE DOMINANT AND MAIN OBJE CT OF THE ASSESSEE IS CHARITABLE AND NOT FOR MAKING PROFITS. 48. A LOOK AT THE INCOME STREAM OF THE ASSESSEE CLE ARLY REVEALS THAT ALL THE ACTIVITIES FROM WHICH THE ASSESSEE DERIVES INCOME A RE AN INHERENT PART OF THE MAIN OBJECT OF THE ASSESSEE. IT IS CLEAR FROM T HE FACTS OF THE CASE THAT PROFIT MAKING IS NOT THE DRIVING FORCE OR OBJECTIVE OF THE ASSESSEE. RATHER THE PURPOSE FOR WHICH THE ASSESSEE WAS CREATED IS T O REGULATE AND DEVELOP DRINKING WATER AND DRAINAGE FACILITIES IN THE URBAN AREAS OF THE STATE OF KARNATAKA AND FOR MATTERS CONNECTED THEREWITH. THIS MAKES IT CLEAR THAT ANY INCOME GENERATED BY THE ASSESSEE DOES NOT FIND ITS WAY INTO THE POCKETS OF ANY INDIVIDUALS OR ENTITIES. IT IS TO BE UTILIZED FULLY FOR THE PURPOSES OF THE OBJECTS OF THE PETITIONER. 49. KEEPING IN MIND THE ABOVE FACTUAL ASPECTS AND T HE PROVISIONS OF THE KIDA ACT, AND PRINCIPLE LAID DOWN IN THE AFORESAID DECISION OF THE HONBIE DELHI HIGH COURT IN THE CASE OF INDIA PROMOTION ORG ANIZATION (SUPRA), IN OUR VIEW, WILL CLEARLY SHOW THAT THE ASSESSEE DOES NOT DRIVEN PRIMARILY BY DESIRE OR MOTIVE TO EARN PROFITS BUT TO DO CHARITY THROUGH ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY. THE ASSESSEE I S OPERATING ON NO PROFIT BASIS. THIS IS SUBSTANTIATED BY THE ACTUAL INCOME R ECEIVED ON OPERATIONS OF THE ASSESSEE AND THE EXPENDITURE INCURRED SET OUT I N THE EARLIER PARAGRAPHS OF THIS ORDER. THE PROVISO TO SEC2(15) O F THE ACT IS THEREFORE NOT APPLICABLE TO THE CASE OF THE ASSESSEE. WE THEREFOR E HOLD THAT THE ASSESSEE IS ENTITLED TO THE BENEFITS OF SEC.11 OF THE ACT. T HE AO HAS NOT DISPUTED THE CONDITIONS NECESSARY FOR ALLOWING EXEMPTION U/S.11 OF THE ACT, EXCEPT THE APPLICABILITY OF PROVISO TO SEC.2(15) OF THE ACT. I N VIEW OF OUR CONCLUSIONS THAT THE SAID PROVISO IS NOT APPLICABLE TO THE CASE OF THE ASSESSEE, WE HOLD THAT THE ASSESSEE'S INCOME IS NOT INCLUDIBLE IN-THE TOTAL INCOME AND THEREFORE THE INCOME RETURNED BY THE ASSESSEE IS DI RECTED TO BE ACCEPTED. 10. WE FIND FROM THE SUBMISSIONS OF ASSESSEE RECORD ED BY LD.CIT(A) IN IMPUGNED ORDER THAT, FACTS FOR YEAR UN DER CONSIDERATION AS WELL AS PRECEDING AND SUCCEEDING ASSESSMENT PAGE 16 OF 19 ITA NOS.951 & 903/BANG/2017 YEARS ARE SAME AND THEREFORE RESPECTIVELY FOLLOWING THE REASONING OF THIS TRIBUNAL IN ASST. YEAR 2009-10, WE ARE OF T HE OPINION THAT, PROVISIONS OF SECTION 2 (15) OF THE ACT ARE NOT APP LICABLE IN THE CASE BEFORE US. WE THEREFORE HOLD THAT INCOME OF AS SESSEEE WILL BE ELIGIBLE TO CLAIM EXEMPTION UNDER SECTION 11. ACCORDINGLY GROUND 2-3 STANDS ALLOWED. GROUND 4-9: 11. ADMITTEDLY, SURPLUS ARISES DUE TO INTEREST INCO ME AND OTHER INCOME IN THE NATURE OF PENALTY AND OTHER CHARGES, AND NOT FROM ACTIVITY OF ACQUISITION OF LAND AND PROVIDING INFRA STRUCTURE FACILITIES FOR INDUSTRIAL DEVELOPMENT. HOWEVER, WE NOTE THAT LD.AO HAS NOT VERIFIED WHETHER, ASSESSEE SATISFIES PROVIS IONS OF SECTION 11 SO FAR AS APPLICATION OF INCOME IS CONCERNED, FO R AVAILING EXEMPTION UNDER SECTION 11 OF THE ACT. WE ACCORDING LY, DIRECT LD.AO TO VERIFY THE SAME AND TO CONSIDER CLAIM IN A CCORDANCE WITH LAW. ACCORDINGLY, THESE GROUNDS ARE ALLOWED FOR STATISTI CAL PURPOSES. 12. GROUND NO. 10 IS CONSEQUENTIAL IN NATURE AND THEREFORE DO NOT REQUIRE ANY ADJUDICATION. 13. GROUND NO. 11 IS GENERAL IN NATURE. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED AS INDICATED HEREINABOVE. REVENUES APPEAL 14. ONLY ISSUE RAISED BY REVENUE, IS IN RESPECT OF DEPRECIATION ALLOWED BY LD.CIT (A), ON ASSETS WHICH HAS BEEN CON SIDERED AS APPLICATION OF INCOME IN ITS ENTIRETY IN EARLIER YE ARS. PAGE 17 OF 19 ITA NOS.951 & 903/BANG/2017 AT THE OUTSET, BOTH SIDES SUBMITS THAT THIS ISSUE S TANDS SQUARELY SETTLED IN FAVOUR OF ASSESSEE BY DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS RAJASTHAN AND GUJARAT CHARITABLE FOUNDATION POONA REPORTED IN (2018) 89 TAXMANN.COM 127. 15 . HONBLE SUPREME COURT NOTED THAT, AMENDMENT TO SECTION 11 (6) OF THE ACT INTRODUCED BY FINANCE ACT NO.2/2014 IS PROSPECTIVE IN NATURE, AND WILL BE EFFECTIVE FROM ASSESSMENT YE AR 2015-16 ONWARDS. HONBLE SUPREME COURT UPHELD THE OBSERVATIONS OF ITAT MUMBAI, WHICH WAS CONFIRMED BY HONBLE BOMBAY HIGH COURT IN CASE OF DIT (E) VS FRAMJEE CAWASJEE INSTITUTE REPORTED IN (1993) 109 CTR 463 , WHEREIN IT WAS HELD THAT IF AMOUNT HAS BEEN SPENT ON ACQUIRING ASSETS AND HAS BEEN TREATED AS APPLICA TION OF INCOME IN THE YEAR IN WHICH SUCH ASSETS WERE ACQUIR ED DOES NOT MEAN THAT IN SUBSEQUENT YEARS DEPRECIATION CANNOT B E TAKEN INTO ACCOUNT. 16. RESPECTFULLY FOLLOWING THE SAME, WE DO NOT FIND ANY INFIRMITY IN THE OBSERVATIONS OF LD.CIT(A), AND THE SAME IS U PHELD. ACCORDINGLY GROUNDS RAISED BY REVENUE STANDS DISMIS SED. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JULY, 2020 SD/- SD/- (B. R. BASKARAN) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 3 RD JULY, 2020. /VMS/ PAGE 18 OF 19 ITA NOS.951 & 903/BANG/2017 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 19 OF 19 ITA NOS.951 & 903/BANG/2017 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -06-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -06-2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -06-2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -07-2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -07-2020 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -07-2020 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -07-2020 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS